Progressive Business : An Intellectual History of the Role of Business in American Society

Today, an increasing number of researchers, citizens, politicians, civil organizations, activists, and corporations are concerned with questions such as: Can the financial rationality of firms be constrained by social concerns? Can the market be reformed 'from within'? Starting in the post-Civil War period of American industrialization, the book traces the emergence of ideas about reforming businesses in the American context, and the ideological and intellectual disputes about these ideas. This book offers a new historical, critical, and in-depth understanding of ideas that have today become increasingly widespread in debates about: corporate social responsibility, corporate philanthropy, corporate citizenship, social entrepreneurship, creating shared value, doing business and being virtuous at the same time. What underlies this discourse is the claim that corporations can change from 'within' - reforming themselves into being good citizens of society. While there has been much enthusiasm about ideas of restructuring the corporation, and the relationships between business and society, critics have argued that businesses continue to focus exclusively on making money. What neither the overly optimistic nor the overly sceptical typically takes into consideration, however, is the long history of social and humanistic business and management ideas. This book offers a new intellectual history of ideas about socialising or humanising capitalism from within, and the critiques of these ideas. It introduces the concept of 'progressive business' as an analytical category around which these competing ideas can be arranged and studied. This conceptual innovation will allow the reader to acknowledge remarkable resemblances between present day ideas of corporate social responsibility and corporate citizenship, and earlier notions of the soulful corporation, industrial betterment. This will be helpful for gaining new insight into these long-lasting debates about state, business and civil society relationships, and thus for grasping the intellectual background for present-day debates. Cover 1 Progressive Business: An Intellectual History of the Role of Business in American Society 4 Copyright 5 Dedication 6 Preface 8 Acknowledgments 10 Contents 12 List of Tables 13 Introduction: An Intellectual History of American Market Reformers and their Critics 14 Toward a “gentler capitalism”? 14 Market reformism: definition 17 Normative justifications of capitalism go far beyond free market thinking 18 An American spirit of capitalism? 20 Karl Polanyi’s legacy 21 The history and strategy of corporate social responsibility and business ethics 22 The approach 23 Book overview 26 Concepts 28 Notes 29 1: O Father, Where Art Thou: The Spirit of Paternalistic Capitalism in the Age of the First Great Transformation (1870s–1900) 32 The challenges of industrialization 34 Responding to industrialization: market reformism as an alternative promise of social protection 36 Christianity as civilizer 40 An early progressive evaluates a company town 47 In defense of laissez-faire and “the forgotten man” 52 The business of business is everyone’s business 58 Conclusion: paternalistic market reformism and its critics 61 Notes 64 2: A Corporation Lives in Society: The Invention of Managerial Capitalism in the Age of the New Deal (1930s–1960s) 67 Market reformists steering clear of new challenges 67 Beyond laissez-faire? Big business, crisis, and post-capitalism, c.1900–45 69 The whole is greater than the sum of its parts: Barnard in praise of cooperation 77 If it exists, it must be legitimate: the moral organization 79 Against the “oversimplification of economic life” 80 Beyond individualism and collectivism 81 Greatness achieved through self-sacrificing participation in an organization 83 Restoring communities: Mayo and human relations 84 Drucker: “A corporation lives in society” 89 A market solution to unemployment 93 Economic man: natural or rational? 94 The soulful corporation 95 The American business creed 98 Conclusion: legitimizing the “social corporation” in the midst of mid-century regulated capitalism 103 Notes 108 3: The New Man Wants Your Soul: Critiquing Managerial Capitalism (1945–1960s) 117 Contested concepts of American capitalism and of the corporation 117 Criticisms of the all-embracing corporation 118 “Cool” contracts or unbreakable bonds? 126 Galbraith’s Keynesianism and the concept of countervailing power 128 Against the uncontested principle of market self-regulation 130 Building checks and balances into the economy 133 Neoliberals against social responsibilities of business: on the sanctity of property rights 135 “A fundamentally subversive doctrine” 139 The “soulful corporation” and the Marxist argument against it 141 “Business is America’s national game” 142 Conclusion: contesting the image of the moral, social, and soulful corporation 147 Notes 150 4: How to Do Well and Do Good: The Spirit of Entrepreneurial Capitalism in the Age of the Second Great Transformation (1970s–2000s) 155 From the New Deal era to triumphant capitalism: polarization, the crisis of Keynesianism, and the end of a bipolar world order (late 1960s–1990s) 156 TINA: the supremacy and necessity of capitalism 159 A return to the classical business creed? 163 Market populism 165 Enter the “new economy” 168 Revolutionary business 168 The end of “the cultural contradictions of capitalism” 170 We are all capitalists now 171 Moral self-governance in an age of globalization 173 Doing business in the service of Christianity, the nation, or humanity and life itself 176 A divided reform movement? 184 The entrepreneurial self 185 No limits to individual growth 186 Covey reads Franklin: the return of the “self-made man” 188 Lessons from Dachau: Covey with Frankl 191 It’s the economy, stupid! 192 Conclusion: entrepreneurial market reformism in the age of globalization 195 Resurgence of a classic and a progressive business creed: tension or contradiction? 195 Entrepreneurial market reformism 197 Notes 202 5: Corporations are Not Set Up to be Charities: Critiquing Entrepreneurial Capitalism (1990s–2000s) 208 A revival of critique 208 A neo-conservative’s critique: revisiting Fukuyama 209 Social criticism: inequality, shortcomings of markets, and the need for countervailing power 212 What markets cannot achieve: securing primary goods and public goods 215 Critiquing the power of corporations 218 “If laissez-faire conservatives had had their way” 218 Neo-Marxist social criticism of a global—and total—capitalism 220 Global capitalism as “the sovereign power that governs the world” 221 Resistance: the multitude against empire 222 Immaterial labor as “deep capitalization” and as foundation for a post-capitalist reality 223 A radical postmodern republicanism against capitalism 224 The Lexus and the Olive Tree of the far left? 225 Sociological and political critiques of moral self-governance of business 227 The potentials and the limitations of “really existing CSR” 228 Critiquing moral self-governance: neoliberalism, hostile worlds, and deradicalization 230 Republican liberalism: putting society and economy in the right order 233 The myth of amoral business 235 Ethical limitations of corporate philanthropy and of the business case for ethics 235 Conclusion: triumphant global capitalism in an age of a new “great transformation” is countered by social and conservative critiques 238 Critiquing the progressive business creed 239 Notes 243 Conclusion: Progressive Business and its Critics in Retrospect 245 Social protection through business? Concluding remarks 246 What is wrong with market reformism? Historical critiques in retrospect 252 Market reformism’s failure in respect to democracy, universal welfare, and institutional pluralism 255 Market reformism provides an ideological smokescreen for capitalism, leaving social critics in the dark 256 Market reformism: an instrumentalist kind of ethics 256 Diagnostics: market reformism as paternalism or as part of neoliberal governance? 257 Free market liberalism and its critique of market reformism 258 The profit-maximizing firm 259 “In the final instance . . . ”? Renewing ideology critique 260 Market reformism in the aftermath of the financial crisis 261 Notes 263 Bibliography 264 Index 280 Offering A New Intellectual History Of Ideas About Reforming Capitalism From Within, This Book Traces The Emergence Of Different Value Systems In The American Context, Offering A Fresh Perspective On Debates About Capitalism In The Late 19th Century And 20th Century. Introduction : An Intellectual History Of American Market Reformers And Their Critics -- O Father, Where Art Thou: The Spirit Of Paternalistic Capitalism In The Age Of The First Great Transformation (1870s-1900) -- A Corporation Lives In Society : The Invention Of Managerial Capitalism In The Age Of The New Deal (1930s-1960s) -- The New Man Wants Your Soul : Critiquing Managerial Capitalism (1945-1960s) -- How To Do Well And Do Good : The Spirit Of Entrepreneurial Capitalism In The Age Of The Second Great Transformation (1970s-2000s) -- Corporations Are Not Set Up To Be Charities : Critiquing Entrepreneurial Capitalism (1900s-2000s) -- Conclusion : Progressive Business And Its Critics In Retrospect. List Of Tables. Definition Of Market Reformism (progressive Business) -- Market Reformism In The First Great Transformation (c.1870-1900) -- Rival Views On Social Protection In The First Great Transformation (c.1870-1900) -- Market Reformism In The New Deal Era (c.1930-70) -- Two Ideal Types Representing The Relationship Between Individual And Organization -- Rival Views On Social Protection In The New Deal Era (c.1930-70) -- Market Reformism In The Second Great Transformation (c.1990-2000s) -- Rival Views On Social Protection In The Second Great Transformation (c.1900-2000s) -- Comparing Market Reformism In The First Great Transformation, The New Deal Era, And Second Great Transformation -- Comparing Leftist Critiques Of Market Reformism In The First Great Transformation, The New Deal Era, And The Second Great Transformation. Christian Olaf Christiansen. Includes Bibliographical References And Index.